The Following Figure Shows the Downward Sloping Demand and Marginal

question 30

Multiple Choice

The following figure shows the downward sloping demand and marginal revenue [MR] curves and the upward sloping marginal cost [MC] curve of a monopolist.
Refer to Figure 12-2.Compared to perfect competition,monopoly pricing introduces efficiency loss equal to the area:

• A)VWE.
• B)ZVN.
• C)HEF.
• D)JHFK.

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Definitions:

Marginal Revenue

Marginal revenue is the additional income generated from selling one more unit of a good or service.

Profit-Maximizing

A method or plan designed to maximize profits from business activities.

Fixed Costs

Expenses that remain constant regardless of the amount of goods produced or sold, including lease payments, wage bills, and insurance fees.

Market Price

The existing rate at which an asset or service is offered for buying or selling.